Treasury Wine Estates Talks Terroir, Takeover Bids

These days, Treasury Wine Estates is dividing its focus between producing world-class wines and evaluating a pending takeover bid from New York private equity firm Kohlberg Kravis Roberts & Co. (KKR). Founded and run Henry R. Kravis and George R. Roberts, KKR has made investments in many industries worldwide, and recently offered a hefty takeover bid for Treasury Wine Estates.

According to Jewish Business News, earlier this week, “the Board of Directors of Australian wine maker Treasury Wine Estates announced it has received a revised, increased offer to acquire all the company shared from giant US private equity firm [KKR], acting together with Rhône Capital L.L.C., another New York private equity firm,” of the pending transaction. This new, all-cash offer is for about $4.84 per share, and reflects an increase of 10.6% from a previous proposal made by KKR earlier this year.

Business insiders are speculating that this new proposal will prove to be very enticing to the board of directors at Treasury Wine Estates, which originally rejected KKR’s earlier offer. Clive Minchom for Jewish Business News notes that “it is in the interests of its shareholders to at least engage further with KKR and Rhône, and to raise its skirt a little to shore more than just a pretty ankle,” of possible factors like the company’s shareholders that are putting pressure on the proposed deal.

Treasury Wine Estates has many strong assets and company figures, such as 11,000 hectares of vineyards and sales of 32 million cases of wine annually, so it is unsurprising that KKR and Rhône would want to invest. Last year, KKR launched a new Asia-Pacific fund with a $6 billion budget, making this Australian company, which owns prestigious wine brands such as Lindemans and Rosemount, a perfect investment option for the private equity firm.

Although the current offer looks difficult to resist, no plans to accept KKR’s bid have been confirmed by Treasury Wine Estate.